Modern Ghana logo

FEATURED: Can We Blame Religion For Africa’s Economic Woes?...

09.08.2005 Business & Finance

Timber companies failing to pay bid fees


Akyawkrom (Ash), Aug. 9, GNA - Out of a total of 73.4 billion cedis revenue expected from the Timber Competitive Bidding process in 2003 and 2004, only 30 billion cedis has so far been paid by companies which bided for concessions to harvest timber from the country's forest. The non-payment of these huge sums of revenue by the companies, which had already harvested the logs and exported them, was hampering the effort by the government to mobilise the needed internally generated revenue to support the developmental process of the nation.

Mr Kwaku Agyemang-Manu, Deputy Minister of Finance and Economic Planning, who announced this, said the government was taking bold steps to check all flaws and inefficiencies militating against the achievement of targets set for non-tax revenue in the country.

Mr Agyemang-Manu was speaking at a day's workshop on Competitive Bidding for timber resources at the Wood Industries and Training Centre (WITC) at Akyawkrom near Ejisu on Tuesday.

The workshop, which was organised by the Forestry Commission (FC) in collaboration with the Ministry of Lands, Forestry and Mines, brought together all stakeholders in the timber industry and senior officials of the Ministry of Finance and Economic Planning to discuss, deliberate and decide on various issues relating to ensuring successful competitive bidding process for the granting of timber harvesting rights.

It is believed that the first three biddings which were organised in 2003 and 2004 after the passage of the Timber Resources and Management (Amendment) Act 2002 (Act 617) and Timber Resources Management (Amendment) Regulations 2003 (LI 1721) had some shortcomings. Some companies were said to have overpriced their lots during the biddings and were finding it difficult in mobilising funds to honour their financial obligations.

Mr Agyemang-Manu expressed worry about the current fraudulent deals by some companies and officials of revenue generating agencies to deny the government of the required revenue for national development. He said the competitive bidding was introduced to ensure transparency and fairness in the timber industry and urged the operators to assist the government to achieve its objectives of transparency, good governance and enhanced revenue in the industry.

Professor Dominic Fobih, Minister of Lands, Forestry and Mines, said one major concern of the Ministry was several complains made by some timber companies on the flawed inventory data that formed the basis of the competitive bidding.

He urged the Forestry Commission to take the necessary steps to rectify all anomalies that were detected in the previous bidding exercises to avoid the recurrence of the problems the exercise had encountered in the three previous biddings.

Prof Fobih urged the companies to take keen interest in the proper procedures that they needed to follow in the bidding process to avoid problems.

Mr John Ekow Otoo, Acting Chief Executive of the Forestry Commission, said the Commission had taken a number of measures to reduce delays in the payment of plantation bid amounts.

He said as part of the measures, companies would now pay 50 per cent of the bid amount upfront instead of the 25 per cent and another 50 per cent in six months time.

Mr Otoo said the Commission was also negotiating with consultants to set an upper limit bid price in addition to the reserved bid price that would both be held confidentially by the consultants to minimise or eliminate speculation in the preparation of bids which often led to inflated bids.